BCSC panel issues lifetime ban against B.C. man for attempted fraud

VANCOUVER, Oct. 11, 2012 /CNW/ - A British Columbia Securities
Commission panel has permanently banned a B.C. man from the province's
capital markets for making misrepresentations in an attempted fraud.

The panel found that between 2009 and 2012, Paul Lester Stiles promoted
an investment in Velocity Entertainment Inc. that he claimed would
provide B.C. investors with returns ranging from 12% in one year to
100% within six months. Stiles was the sole director of Velocity, which
was dissolved in 2005 and has never filed a prospectus in B.C.

In July and August 2011, BCSC staff discovered two identical
advertisements in the Financial Services section of Vancouver's
Craigslist website that promoted the Velocity investment. A BCSC
investigator posing as a potential investor responded to the
advertisements, requesting further information. In the ensuing email
correspondence, Stiles promoted the investment and sent the
investigator an investment agreement claiming, among other things, that
the money would be used by Velocity to produce two feature films.
Stiles made a number of false statements in promoting the investment,
including that it would provide a "totally secure" rate of return of
100% in six months, and provided instructions to transfer funds to his
bank account.

In March 2012, BCSC staff discovered a third advertisement on Craigslist
promoting Velocity. Again, a BCSC investigator posing as an investor
responded to the advertisement, and in the ensuing email correspondence
Stiles made numerous claims, including that he would guarantee the
investment.

In its decision, the panel noted that Stiles had posted similar
solicitations on Craigslist in September 2009, and that BCSC staff had
warned him that his capital raising activities were in contravention of
securities laws the following October. In April 2012, he again ignored
BCSC staff warnings that his conduct breached securities laws. The
panel characterized Stiles' disregard of BCSC staff warnings as
"contempt for our system of securities regulation", and stated that his
conduct "shows that he has attempted fraud before and will continue to
do so."

For his misconduct, Stiles is permanently banned from trading in
securities, purchasing securities or exchange contracts and from
becoming or acting as a director or officer of any issuer or
registrant. He is also permanently prohibited from becoming or acting
as a registrant, investment fund manager or promoter, from engaging in
investor relations activities, and from acting in a management or
consultative capacity in connection with the securities market.

The panel also ordered Stiles to pay an administrative penalty of
$35,000.

The B.C. Securities Commission is the independent provincial government
agency responsible for regulating trading in securities within the
province. You may view the decision on our website, www.bcsc.bc.ca, by typing Stiles, Velocity Entertainment Inc. or 2012 BCSECCOM 383 in
the search box. Information regarding disciplinary proceedings can be
found in the Enforcement section of the BCSC website.